- Single-tenant net lease sales volume dropped to $9.61B in Q2 2025 — down 13.1% from Q1 and 4.6% year-over-year — marking one of the lowest quarterly totals in over a decade.
- Cap rates are showing signs of stabilization, with retail increasing just two basis points from Q1 to Q2, aided by improved financing conditions and narrowing buyer-seller price gaps.
- Industrial remains the largest segment by sales volume, while retail is the only sector to post a year-over-year increase. Private buyers lead the market with 43% of transactions.
The US single-tenant net lease market saw one of its weakest quarters in more than 10 years in Q2 2025, reports GlobeSt. Sales volume dropped to $9.61B.The decline puts midyear sales at $20.66 billion. This suggests the market could post its softest annual total since before the pandemic. That outcome is likely if activity doesn’t rebound.
A Market Slowdown
According to Northmarq, Q2’s sales were down 13.1% from the first quarter and 4.6% from the same period in 2024. Industrial led all sectors with $5.44B in transactions, followed by retail at $2.24B and office at $1.92B. Only retail posted a year-over-year gain, rising 5.7% despite a sharp quarter-to-quarter drop.
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Signs Of Stability
Northmarq’s Lanie Beck noted that cap rates are leveling off, with retail’s two-basis-point quarterly increase far below the steep jumps seen in 2023. More consistent financing and closer alignment between buyer and seller expectations are fueling cautious optimism for a stronger second half.
Who’s Buying
Private investors accounted for 43% of single-tenant transactions in the first half, followed by institutional buyers at 25%. Public REIT activity fell to just 7%, while international investors made up 5%, primarily in select retail deals.
Multi-Tenant Resilience
The multi-tenant market is holding steady, with sales potentially matching 2023’s levels. Private buyers remain dominant at nearly 60% of purchases, with industrial and shopping center retail drawing strong interest. Cap rates in this segment have fluctuated within just seven basis points over the past five quarters.
Why It Matters
If investor confidence holds and pricing stability continues, the market could see a second-half rebound. However, the year is still defined by a sharp drop in sales. Buyer composition is shifting, and caution remains high. This combination makes 2025 a potential low point for the net lease sector.
